Reddit is the latest social media to be publicly traded. Here are its initial market valuation and largest shareholders.
The San Francisco-based social media Reddit will file an initial public offering (IPO) at $34 per share, the highest level of its expected range. Reddit is a forum-based social network, with several so-called “subreddits” about a variety of different subjects.
Reddit was founded in 2005 by Steve Huffman (the current CEO), Aaron Swartz, and Alexis Ohanian. Although it boasts 267 million weekly users, Reddit never achieved a true global success unlike other social networks of its generation like Facebook.
According to the IPO filing, Reddit has more than 100,000 active subreddits and 1 billion posts.
The $34 per share valuation puts Reddit’s market cap at $6.4 billion, down from the $10 billion valuation obtained at a private funding event in 2021. However, the IPO is expected to attract a flock of new shareholders, immediately increasing its stock price.
The IPO filing also revealed Reddit never closed a year with a profit. Net losses in 2023 amounted to $90.8 million, a major improvement from 2022’s $158.6 million net losses. The improvement was mainly caused by a significant revenue spike, grossing $804 million from $666.7 million in 2022.
Despite its losses, Reddit remains an attractive choice for tech investors. Its large user base allowed the social network to partner with Google, which will use Reddit’s posts to train its new AI chatbot Gemini.
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Major shareholders
Reddit, which will use RDDT as trading code on the New York Stock Exchange, has three main shareholders. Advance Publications, the parent company of Vogue, The New Yorker, and Wired, owns the largest share at 30%.
Tencent owns the second-largest share of Reddit at 11%. Tencent is a Shenzhen-based conglomerate, one of the largest communication companies in the world. It owns China’s most popular social network WeChat, which also acts as a so-called “super-app”. These applications allow users to conduct most of their online activities through one single platform.
Finally, Reddit’s third-largest shareholder is OpenAI’s founder Sam Altman. OpenAI is the most talked-about startup in recent years, founding ChatGPT and pioneering the use of Large Language Models.
Sam Altman reportedly sat on Reddit’s board in 2021 at the latest. Huffman, the company’s chief executive, often publicly thanked Altman for its work and support.
Reddit also plans to give away 10% of its shares to the app’s users, commonly referred to as “Redditors”. The platform already started studying applications filed by Redditors to acquire part of the shares. Only US-based Reddit users can access the program.
